In September 2015, the U.N. General Assembly adopted the 2030 Agenda for Sustainable Development that includes 17 Sustainable Development Goals (SDGs) — see below. Since then, companies have been assessing their role in contributing to this shared global agenda. The business benefits of doing so can include: access to new markets; stabilizing and strengthening markets of current or future operation; and of course, enhanced reputation and stakeholder relations.
To gain reputational and stakeholder benefits, your company will need to effectively and clearly communicate on your efforts to contribute to the SDGs.
Early reporting on the SDGs can lay the groundwork for a robust approach for future SDG related disclosure and prevent a company from lagging behind peers. Reporting against the SDGs this year presents a valuable opportunity for businesses to hone their strategic direction as sustainable development challenges increasingly take center stage in the international community. SDG reporting is still nascent, so acting now — before the reporting guidance, developed by the Global Reporting Initiative (GRI) and United Nations Global Compact (UNGC) is published in September — demonstrates corporate commitment. A dry-run can benefit companies by laying the foundation for a reporting process by enabling companies to:
- map out the process for future efforts
- identify gaps in areas that they would need to cover once the official reporting guidance comes out.
To maximize the benefits of your SDG related efforts as well as current sustainability initiatives, we recommend taking the following steps. A number of tools and resources can provide guidance through this process. For help and counsel, professionals thoroughly immersed in SDGs can help companies navigate the complex landscape where SDGs and companies meet directly.
1. Map your business to the SDGs
Take the time to understand the SDGs and their targets and determine how your organization can contribute to the advancement of the SDGs. An impact matrix can determine what you can affect the most and what can affect you the most. While materiality matrices focus on how your actions address stakeholder interests, an impact matrix identifies the environmental and social impacts of the company’s business lines, defines impacts on your business driven by social and environmental issues, and helps you prioritize which ones to address.
The World Business Council for Sustainable Development, the U.N. Global Compact and the GRI developed the SDG Compass as a guidance tool for companies. The SDG Compass can help companies by:
- explaining how the SDGs affect your business
- assisting with goal setting
- providing advice on hardwiring sustainability into your business
The guide points to commonly used business tools that may be useful when assessing your organization’s impact on the SDGs.
2. Define what you are doing, what you want to do, and how you will get there
After mapping out SDG relevant impacts, review how you are addressing them. What are you already doing that links to the SDGs? Where are there gaps? If topics are new reporting areas, you can review the Sustainability Accounting Standards Board (SASB)’s guidance for insights on how best to disclose your efforts.
Define and identify indicators related to the mapped SDGs. You can compare your existing business indicators against the ones referenced in the SDG Compass.
Be honest and report the gaps. Where you have yet to collect data, share your internal process and policies to address these related SDGs and any indicators that you plan to report against in the future. For priority areas where you have no initiatives in place, share your commitment to do so in the future, areas you will monitor and how you want to have an impact. If you are ready, you may want to include a timeframe for SDGs-related initiatives.
Where relevant, share which stakeholders you are engaging (governments, NGOs and other businesses) and which partnerships you envision will help you achieve your goals for the SDGs. As you think about establishing partnerships to address SDGs going forward look for shared values and find common ground for social impact. Evaluate potential partners on their right skills set to drive impact as well as assessing for shared values.
3. Help your stakeholders see your vision
If relevant, include a visual that maps out SDGs by region and highlight which SDGs are particularly relevant for certain countries and operations.
Take this opportunity to tell an impact story and show your impact metrics, if you have them. Using the SDGs as an impact framework serves a dual purpose. First, as a tool to garner the internal buy-in for a new and sustainable approach to business. Second, as a consistent metric against which companies can assess gaps and measure their own progress toward one or many SDGs they choose to pursue. According to the SDG Compass, “many issues such as gender equality, health or sustainable consumption and production cut across several SDGs. Your company may find it helpful to explain how the progress made in one area has contributed to progress elsewhere.”
4. Reduce reporting burden
Report on the SDGs through your existing CSR reporting system. The objective of adopting the SDGs as an impact framework is to communicate and measure your CSR performance in an effective and strategic way. If you already have an established CSR reporting system, there is no need to do a separate report on the SDGs. Integrate whatever information you mapped for the SDGs into your existing CSR report.
Until the official reporting guidance on the SDGs is ready, you can add information on the SDGs to your Content Index if you have one. If you follow GRI standards, you can map the relevant GRI disclosures against the SDGs relevant to you. In addition, companies have been using visual solutions in their reports, such as icons and dynamic online versions of the reports to highlight relevant SDG information. Others, such as Mastercard, also have summarized their SDGs contributions into a fact sheet (PDF).
In conclusion, by starting early, companies can be prepared if governments institute sustainability reporting requirements. This is the first time the U.N. explicitly has called on the private sector to help solve sustainable development challenges (including extreme poverty and hunger, inequalities and climate change). SDG target 12.6 calls for governments to “encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.”
Understanding how business impacts contribute to the advancement of the SDGs is only the first step for companies to demonstrate leadership in this new global sustainability agenda. The next step is for companies to show stakeholders — including investors, local governments, clients and employees — their commitment and progress towards the SDGs. Corporate sustainability disclosures reveal who is “walking the talk” and who is merely paying lip service to the SDGs.
Sonal Mahida and Carolina Lima Perlingiere